
Your optimum profitable growth strategy
– today more important than ever
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Strategy
A profitable growth strategy is a comprehensive, dynamic guidance system of
- policies (guiding principles and rules that outline the organization’s approach to growth)
- instruments (tools and mechanisms used to implement the strategy, such as market analysis, financial models, and performance metrics)
- decisions (choices made about target markets, product development, pricing, and resource allocation)
- resources (financial, human, and technological assets deployed to support growth initiatives)
- objectives (specific, measurable, achievable, relevant, and time-bound goals for revenue and profit growth)
- management methods (approaches to planning, organizing, leading, and controlling the growth process)
- initiatives (projects and programs designed to generate new revenue streams, increase market share, or improve profitability)
aimed at creating advantages and driving sustained, profitable growth for a company; this is realizing growing revenues and growing profits at the same time.
This overarching strategy precedes and guides operational management, ensuring that all activities contribute to value creation.
Experience demonstrates that a robust strategic management approach, coupled with proven tools and methods, is essential for successfully realizing profitable growth.
The Enterprise Stakeholders
Operative management often focuses on internal processes and internal stakeholders, which are highly observeable and steerable, with other words : highly manageable.
Strategic management, in contrast, must address the enterprise’s external stakeholders (markets linked to the business), which are only weakly observable and hardly or not at all controllable, in other words: not directly manageable.

‚Strategic‘ versus ‚Operative‘ : the Distinction
A few criteria help differentiate between the realms of „Strategic“ and „Operative“ management:
Time Horizon
The timeframe over which decisions and actions are planned and expected to have an impact. A key differentiator.
Operative management focuses on the short-term, day-to-day activities and immediate goals (e.g., weekly production targets, monthly sales figures). Strategic management takes a long-term perspective, considering years or even decades, and focuses on achieving overarching goals (e.g., market leadership, long-term growth).
Uncertainty
The degree to which future events and outcomes are unknown or unpredictable.
Strategic management deals with significantly higher uncertainty than operative management. Strategic decisions often involve factors beyond the company’s control (e.g., economic shifts, technological disruptions, competitor actions). Operative management deals with more predictable, routine tasks where uncertainty is lower.
Irreversibility
The extent to which decisions and actions cannot be easily undone or reversed.
Strategic decisions often involve high irreversibility due to their long-term nature and significant resource commitments (e.g., major investments, mergers and acquisitions). Operative decisions are typically more reversible and allow for adjustments as needed.
Complexity
The number of factors, interdependencies, and variables involved in a decision or process.
Strategic management involves greater complexity as it needs to consider a wider range of internal and external factors, their interactions, and potential consequences. Operative management focuses on more localized, well-defined tasks and processes.
Cause and Effect Relations
The clarity and predictability of the relationship between actions and their outcomes.
Cause and effect relations are often more direct and clear in operative management (e.g., increase marketing spend, observe change in sales). In strategic management, the links between actions and outcomes are often complex, delayed, and influenced by numerous external factors.
Money at Risk
The financial resources committed to a decision or activity and the potential financial impact of its success or failure.
Strategic decisions typically involve significantly more money at risk due to their scale and long-term impact on the company. Operative decisions usually involve smaller, more manageable financial commitments.
Information Base
The type and amount of information required to make informed decisions.
Strategic management relies on a broader and more diverse information base, including market research, competitor analysis, economic forecasts, and technological trends. Operative management focuses on more specific, internal data related to daily operations.
Intention and Focus
The underlying purpose and goals driving decisions and actions.
Strategic management is driven by the explorative intention to achieve long-term, overarching goals such as sustainable growth, competitive advantage, and value creation; it focuses on effectiveness. Operative management is exploitative and focuses on efficiency and optimization of day-to-day operations to support the strategic goals.
The distinction at a glance :

Classes of Strategic Management – from District League to Premier League
There is an unmanageable flood of procedures, methods and tools for strategic management.
The wheat separates from the chaff with two simple criteria :
- Criterium 1
Does the strategic management method adress the strategy critera ?
(all of them or at least the majority of them)
- Criterium 2
Does the strategic management method work on qualitative information (e.g. text, principles, guidelines or the like) or does it work on quantitative information – with other words is it data-driven, allowing for computation, simulation, validation and optimization ?
Using just these two criteria, the variety of strategic management tools and methods boils down to four categories.

- Pop
these are Strategic Management methods, which work on a pure qualitative basis (often backed up by the manager’s individual experiences and by so-called ‚common sense‘) and which do not explicitely adress strategy criteria.
Classified as ‚Pop‘ , because they are very popular in management practices. - Philosophy
these are methods, which work qualitatively and which do adress strategy criteria (or at least try to do so … ).
Classified as ‚Philosophy‘, because in real world’s practice the Strategic Management problem space can not be adressed without quantitative methods (nor in planning, neiter in execution)Some well-known strategy-philosophy classics :
- Efficient Managers do the things right. Effective Managers do the right things. (Peter Drucker)
- Strategy without execution is useless and execution without strategy is aimless (Morris Chang)
- The rear view mirror is much clearer than the windshield (Warren Buffet)
- Plans are nothing – planning is everything (General Eisenhower)
- Companies who do not plan, plan to fail (General von Clausewitz)
All of these insights are true in principle – but hardly operationable in real world settings.
- Mainstream
these methods work on a quantitative basis (digital era like) but do not adress the entire strategy space. Typical example is the Balanced Scorecard like target and execution planning.
Classified as ‚Mainstream‘, because the usage of these approaches (pseudo-strategy approaches) is widespread - Professional
these are scientifically-mathematical approaches, almost always quantitative computerised methods, which do adress the real world strategy problem space in major or in all aspects.
Classified as ‚Professional‘, because professionals use such tools when it comes to investment grade strategic management quality
The subsequent graphics shows an overview of typical strategic management methods per category and in context to the time perspective from history to future.

How to proceed for Profitable Growth
Each strategic management method category has a justification of it’s existence, as long as it is applied in an appropriate situation and as long as it delivers the expected results (!!!).
In case it doesn’t : go for professional methods.
There is an elephant in the room : future uncertainty.
Only professional strategy management methods can catch and control it.
Strategy – the Approach
A successful strategy isn’t just about brilliant ideas; it requires a two-pronged approach.
- Strategy development
to define clear goals and a well-crafted plan. - Strategy implementation
to translate that plan into action through effective communication, execution, continuous monitoring and controlling.
Both are essential for achieving desired outcomes and maintaining a competitive edge.
Strategy Development
There exists a spectrum of methods used in strategy development.
Here’s a breakdown of that spectrum, moving from the least to the most structured:
- Intuition, Gut Feeling & Experience
- This is strategy development based on instinct, experience, and personal judgment. It often relies on the vision or intuition of a strong leader.
- Pros: Can be quick and responsive, suitable for situations requiring immediate action or in highly uncertain environments.
- Cons: Prone to bias, lacks rigorous analysis, and can be difficult to communicate or justify to others.
- Voting Methods:
- Involves gathering input from various stakeholders and using voting mechanisms (e.g., majority rule, weighted voting) to reach a decision on strategic direction.
- Pros: Incorporates diverse perspectives, fosters a sense of ownership and buy-in among stakeholders.
- Cons: Can be influenced by powerful individuals or groups, may not adequately consider the complexities of the strategic issues.
- Target Negotiation:
- Setting ambitious but achievable targets for various aspects of the business (e.g., revenue, market share, profitability). These targets are then negotiated and refined through discussions and feedback from different departments and teams.
- Pros: Provides clear direction and focus, encourages collaboration and alignment across the organization.
- Cons: May lead to short-term thinking if targets are too narrowly focused, can be challenging to balance competing objectives.
- Scenario Planning:
- Developing a set of plausible future scenarios based on different assumptions about key uncertainties. Strategies are then evaluated against these scenarios to assess their robustness and adaptability.
- Pros: Encourages strategic thinking and preparedness for different eventualities, helps identify potential risks and opportunities.
- Cons: Can be time-consuming and resource-intensive, may not be suitable for all types of strategic decisions.
- Quantitative Optimization Under Uncertainty:
- Using advanced analytical techniques (e.g., simulation, optimization models, decision analysis) to evaluate strategic options and identify the optimal course of action, taking into account various uncertainties and risks.
- Pros: Provides a rigorous and data-driven approach to strategy development, can help identify solutions that might not be apparent through intuition or simpler methods.
- Requires specialized skills and tools, can be complex and expensive to implement, may not be suitable for all strategic issues.
Important Considerations:
- No one-size-fits-all:
The best approach depends on factors such as the organization’s size, industry, culture, the complexity of the strategic issues, and the level of uncertainty. - Hybrid approaches:
Many organizations use a combination of methods, e.g., using quantitative analysis to inform scenario planning, or combining target negotiation with voting methods. - Iterative process:
Strategy development is often an iterative process, involving ongoing evaluation, feedback, and adjustment.
By understanding this spectrum, businesses can choose the most appropriate methods for their specific needs and circumstances.
Strategy Implementation
Strategy implementation is the process of putting a chosen strategy into action to reach an organization’s goals. It involves translating the high-level strategic plan into specific actions, initiatives, and tasks that can be executed by teams and individuals across the organization.
Think of it as the „doing“ phase after the „planning“ phase. You’ve figured out where you want to go (strategy formulation), now it’s time to actually get there (strategy implementation).
Strategy deployment and strategy execution
These terms are closely related and often used interchangeably, but there are subtle differences:
- Strategy deployment
Focuses on the systematic cascading of the strategy throughout the organization, ensuring alignment across all levels and departments. It involves communicating the strategy, assigning responsibilities, and providing resources to support the implementation. - Strategy execution
Emphasizes the actual performance of the tasks and activities required to bring the strategy to life. It involves monitoring progress, making adjustments, and holding individuals accountable for results.
Essentially, strategy deployment sets the stage for successful execution by ensuring everyone is on the same page, while strategy execution is the act of carrying out the plan. Strategy implementation encompasses both of these aspects.
Methods
Numerous methods and frameworks can support strategy implementation. Some popular ones include:
- Project Management
Breaking down the strategy into manageable projects with clear objectives, timelines, and resources.
Project management is applied very frequently. It’s a core discipline for implementing strategies that involve change initiatives or complex projects. - Process Management
Optimizing key processes to align with the strategic goals and improve efficiency.
Process Management s applied very frequently in organizations focused on operational excellence and continuous improvement. - OKR (Objectives and Key Results)
Setting ambitious objectives and measurable key results to track progress and drive performance.
OKR is increasingly popular, especially in agile and fast-growing companies. - Balanced Scorecard (BSC)
A performance management framework that translates the strategy into a set of balanced financial and non-financial measures.
BSC is a well-established method used by many organizations to track performance and ensure strategic alignment. - Hoshin Kanri (Policy Deployment)
A structured approach to ensure that the strategy is communicated and implemented effectively across the organization, with a focus on aligning goals and actions at all levels.
Hoshin Kanri is widely used in manufacturing and other industries that require strong alignment and execution discipline.
These methods are not mutually exclusive. Organizations often use a combination of approaches tailored to their specific needs and context.
Growth Strategies: Organic vs. Inorganic
Organic Growth
Organic growth is an internal strategy focused on enhancing existing resources and capabilities to drive revenue increases.
This can involve:
- Product/service innovation: Developing new offerings or enhancing existing ones to better meet customer needs and capture market share.
- Market penetration: Increasing sales of existing products/services to current customer segments through targeted marketing and pricing strategies.
- Market development: Expanding into new geographic regions or customer segments with existing products/services.
Inorganic Growth
Inorganic growth leverages external resources and capabilities to accelerate growth.
Common methods include:
- Mergers and acquisitions: Acquiring or merging with other companies to gain access to new markets, technologies, or talent.
- Strategic alliances and joint ventures: Partnering with other companies to collaborate on new products, services, or markets.
Revenue Models: Recurring vs. Non-Recurring
Recurring Business
Recurring business generates predictable, stable revenue streams from ongoing customer relationships. Examples include:
- Subscription services: Customers pay a recurring fee for access to a product or service.
- Long-term contracts: Customers commit to purchasing products or services over a defined period.
- Maintenance agreements: Customers pay for ongoing maintenance and support of products or equipment.
Non-Recurring Business
Non-recurring business generates revenue from one-time transactions or projects. Examples include:
- Product sales: One-time purchases of physical or digital products.
- Project-based services: Delivering a defined scope of work for a fixed fee.
Business Focus: Current vs. New
Current Business
Current business refers to existing products, services, and markets that generate the majority of a company’s revenue.
Strategies for current business often focus on:
- Optimization: Improving operational efficiency, reducing costs, and enhancing customer satisfaction to maximize profitability.
- Expansion: Increasing market share within existing segments through targeted marketing and sales efforts.
New Business
New business involves developing new products, services, or markets to drive future growth.
This can involve:
- Innovation: Creating entirely new offerings or entering new markets to capture emerging opportunities.
- Diversification: Expanding into adjacent or unrelated industries to reduce reliance on existing businesses.
Optimum Profitable Growth Strategy
Strategy B2B’s methods for optimum profitable growth strategy focus on the quadrant ‚Professional‘: the application of professional quantitative methods of strategic management as advanced analytics (diagnostics, predictions and prescriptions), simulation, digital twins, (numerical) optimization and artificial intelligence.
Only such methods are able to really adress key strategic management factors like money-at-risk, uncertainty etc., that must be considered for investment-grade strategies to achieve optimal profitable growth.